The Labor Department said Tuesday that the consumer price index, a broad measure of the price of everyday goods including gasoline, groceries and rent, rose 0.3% in January from the previous month. Prices climbed 3.1% from the same time last year.
Other parts of the report indicated that inflation has been slow to retreat. Core prices, which exclude the more volatile measurements of food and energy, climbed 0.4% – the largest monthly increase since April 2023. It rose 3.9% annually.
Housing costs were the biggest driver of inflation last month. Rent costs rose 0.6% for the month and are up 6.1% from the same time last year. Food prices rose 0.4% over the course of the month. Grocery costs also rose 0.4% last month and are up 1.2% compared with the same time last year.
The price of both health insurance and auto insurance also jumped in January, rising 1.4% over the course of the month.
The Federal Reserve has signaled it is closely watching the report for evidence inflation is continuing to subside as policymakers try to determine what comes next for interest rates in 2024.
Central bank officials have opened the door to cutting interest rates this year, but they have pushed back against the market’s aggressive expectations. Chair Jerome Powell said during the Fed’s most recent meeting that a March rate cut is likely off the table as policymakers do not have enough confidence that inflation is on the path back to 2%.